FM Sitharaman says taxing cryptos doesn't mean it has been legalised

Breaking her silence on the issue of legalising cryptocurrenices, finance minister Nirmala Sitharaman said that the government has only taxed the profits emanating from cryptocurrency transactions and not done anything to legalise or ban or regulate it.

The finance minister has spoken out at a time when the cryptocurrency tax is getting a mixed reaction with some pointing towards the fact that bringing the transactions under the tax net is a step towards legalising it.

"I am not going to legalise it or ban it at this stage. Banning or not banning will come subsequently, when consultations give me input," Sitharaman said.

The cryptocurrency tax comes at a time when the government is considering the Cryptocurrency and Regulation of Official Digital Currency Bill. The bill didn't find mention among the list that will be taken up during the Budget session.

The issue of legalising private cryptocurrencies is facing stiff resistance from the RBI which has vociferously opposed their roll out warning against their delitirious impact on country's financial stability.

The RBI stood its ground and maintained that private cryptocurrencies are a threat to financial stability.

Speaking after the monetary policy review, RBI Governor Shaktikanta Das said, "Cryptocurrencies have no underlying (value), not even a tulip.”

In het fourth Budget, Finance Minister Nirmala Sitharaman taxed gains on the sale of private crypto assets at a flat rate of 30 per cent, without any deduction or exemption.

Moreover, the loss from the sale of these assets cannot be set off against any other income.

A TDS at the rate of 1 per cent has also been imposed on payments made on transfer of digital assets.